Does Energy Consumption Respond to Price Shocks? Evidence from a Regression-Discontinuity Design

• Tác giả: Paulo Bastos
• Ngôn ngữ: eng
• Ký hiệu phân loại: 333.79 Energy
• Thông tin xuất bản: World Bank, Washington, DC, 2014
• Bộ sưu tập: Tài liệu truy cập mở
• ID: 294290
• Chủ đề: 1. APPROACH; 2. AVERAGE PRICE; 3. AVERAGE PRICES; 4. BALANCE; 5. CAPS

Tóm tắt

This paper exploits unique features of a recently introduced tariff schedule for natural gas in Buenos Aires to estimate the short-run impact of price shocks on residential energy utilization. The schedule induces a nonlinear and non-monotonic relationship between households' accumulated consumption and unit prices, thus generating exogenous price variation, which is exploited in a regression-discontinuity design. The results reveal that a price increase causes a prompt and significant decline in gas consumption. They also indicate that consumers respond more to recent past bills than to expected prices, which argues against the assumption that consumers have perfect awareness of complex price schedules.